Americans bought $6.4 billion worth of cosmeceutical skin care products last year. But customers who read between the fine lines discover that the most potent active ingredient is their own gullibility.

By Erika Kawalek

LAST DECEMBER, DEBRA SCHEUFLER, a 47-year-old attorney from San Diego, gave up on Crème de la Mer, the $110-per-ounce anti-aging face cream with a cultish following. The moisturizer had been part of her morning and nighttime beauty regimen for about four months. But it didn't make her skin "softer, firmer . . . virtually creaseless," as the cream's promotional materials had promised. "Aging lines" were not "noticeably less visible." Her complexion got worse. "My skin was getting clogged and it wasn't looking any younger," she said. "Fine lines were not going away." After looking up the ingredients in a cosmetics dictionary, Scheufler discovered that Crème de la Mer was composed mostly of petrolatum (essentially Vaseline), mineral oil, seaweed extract, and a handful of antioxidants, vitamins, and mineralsin about the same proportions as less expensive creams.

She filed a class action suit against Estée Lauder, Inc., which owns the brand La Mer among others, and against cosmetics companies like L'Oréal and Proctor & Gamble that also manufacture and promote anti-aging skin care products. On grounds of false advertising and unfair competition, Scheufler is seeking reimbursement for herself, in the amount of $500 to $1,000, and for other women and men who believe they've been defrauded by the "anti-aging" claims on cosmetics. "These are cosmetics, but they would have consumers think they have medical uses and benefits," said Howard Rubinstein, one of her lawyers.

In today's marketplace, making an informed decision about cosmetics is difficult, in spite of the law that requires ingredients to be listed in descending order of amount, according to guidelines established by the United States Food and Drug Administration. Called the Fair Packaging and Labeling Act and passed in 1966, the law came about after decades of industry negligence and a burst of consumer activism. Consumers wanted to know what chemicals they were slathering on their bodies. They wanted to keep exaggerated claims about the benefits of a product in check.

In the generation since, the cosmetics industry has repeatedly looked for ways to boost its revenues and circumvent the costs of regulation. At times, the FDA and the Federal Trade Commission have successfully enforced the FPLA and related consumer-protection laws. But as Scheufler and others are discovering, the watchdogs at those agencies are struggling to combat increased challenges from the industry and to live with budget cuts and the government's relatively laissez-faire attitude.

The latest unsubstantiated claims (and, perhaps, unsafe products) made by cosmetics firms come in the form of "cosmeceuticals"cosmetics packed with extra ingredients, like Alpha Hydroxy Acids, Ester-C, and copper peptides said to have therapeutic benefits. They are taking up increasing amounts of counter space at Saks Fifth Avenue, Wal-Mart, and other outlets, as well as air time on the QVC television shopping network. The solid evidence that cosmeceuticals work is scant; published research on specific product formulations is practically nonexistent. Anyone can slap a "ceutical" on a product as easily as he can add "dermatologist-tested," "hypoallergenic," "noncomedogenic," and "all natural."

But many cosmeceuticals look, sound, feeland costa lot like drugs or other FDA-approved therapies. They are often created with pharmacological- or scientific-sounding ingredients and are endorsed by doctors like the mediagenic Nicholas Perricone. This allows the cosmetics companies to price and sell cosmeceuticals like drugsat $110 per ounce, for examplebut because of the FDA's limited resources and its bifurcation of the substances it regulates into drugs and cosmetics, the companies are able to avoid the costly testing and monitoring that a true drug requires.

THE INDUSTRY IS THRIVING FROM THAT NEGLECT. According to an estimate from the market research company Packaged Facts, cosmeceutical skincare products took in more than $6.4 billion domestically in 2004. That's more than half of the $12.4 billion for all cosmeceuticals, an amount that is expected to increase to over $16 billion by 2010. About half of all skin care cosmeceuticals belong to the category of anti-aging creams, a vague category for a class of products that promises to reduce wrinkles, plump skin, promote cell renewal, boost collagen, and expose new skin, among other benefits.

The popularity of cosmeceuticals is growing in tandem with the demand for plastic surgery and dermatological procedures. In 2004, 9.2 million cosmetic surgery procedures were performed, contributing to an $8.4 billion industry that has grown by 25 percent since 2000. The most popular techniques are the least invasive onesBotox injections, chemical peels, and microdermabrasion.

Cosmeceuticals target consumers who are leery of plastic surgery and who want to prevent the need for future surgery, which includes almost all of us. Many product inserts and advertisements, like a well-known ad for Basic Research's StriVectin-SD, imply "Better than Botox" results; others, like an ad for Dior's Capture, offer an "Alternative to a Facelift." Cosmetics companies are racing to unveil products that sound effective and up-to-the-minute, employing the latest buzzwords of the medical establishment. "We've had a lot of clients who want to say 'manufactured in a pharmaceutical laboratory,' " said Richard Morey, a partner with the Washington, D.C., law firm of Kleinfeld, Kaplan & Becker. "It's the aura that you want to give a product, because everybody knows that drugs really work whereas cosmetics are puffery." Lately, the buzz has been about Nicholas Perricone's Alpha Lipoic Acid with Tocotrienols, which purports to reduce spider veins. In a few months, the buzz will be about something else.

Confusion abounds. What is Alpha Lipoic Acid with Tocotrienols, and how much of this stuff do we need to fade spider veins? Are the few cosmeceutical studies that exist scientifically sound? And are cosmeceuticals safe to use with other products? "The intelligent Harvard graduate with a Ph.D. can't make a sensible choice when she goes in and looks for a good moisturizer," said Dr. Albert Kligman, the University of Pennsylvania dermatologist who coined the term "cosmeceutical" 25 years ago to refer to a class of creams that does more than decorate or camouflage and less than treat a disease. Despite the presumed skepticism of consumerscosmetics companies defend themselves by saying that consumers know companies rely on hyperbole and illusion to promote salesthe industry has made believers out of most of the public. An April 2004 survey conducted by the National Consumers League revealed that 6 out of 10 adults think that the FDA tests anti-aging products for safety and efficacy. It does no such thing.

UNTIL THE EARLY 1900s, AMERICAN WOMEN brewed cosmetics in their kitchens. They used ingredients gleaned from the pantry, the farm, the garden, and, occasionally, the local druggist. Most of them learned how to make these concoctions from recipe books that made little distinction among treating the flu, stuffing a turkey, or smoothing a brow. Lard, rosewater, and coconut milk made a pleasing hand cream for Sarah Joseph Hale, the editor of Godey's Lady's Book, a popular 19th-century magazine. What was her anti-aging treatment? Soaking brown butcher's paper in apple vinegar before applying it to her forehead. The remedy likely contained alpha hydroxy acids, present in fruit sugars, which peeled a layer of her skin (exfoliated it), giving it a softer look.

Anti-aging products gained popularity on a mass level in the 1920s, when young women attempted to replicate the boyish figures and faces of men who had been killed in battle, explained historian Fenja Gunn in The Artificial Face. The quest for youth "encouraged beauty salons to produce a range of preparations and treatments designed to erase wrinkles, discourage double chins and generally preserve a youthful complexion." As women entered the workforce in greater numbers and migrated to the city, they began to purchase cosmetics more widely. In addition to the pleasures of grooming, cosmetics seemed to offer users a competitive advantage in both the career and mating markets.

In 1933, a woman known as Mrs. Brown made a trip to Byrd's Beauty Shoppe in Dayton, Ohio. A beautician encouraged her to try a popular eyelash dye called Lash Lure. That night Mrs. Brown was being honored for her volunteer work with the local PTA and, wanting to look her finest, she opted for the treatment. Almost immediately, her eyes itched and burned. The New Republic described her terrible morning after: "Her eyes are gone and the flesh around them is a mass of tortured scars."

The Lash Lure incident capped a series of consumer tragedies. Dozens of women were crippled or poisoned because of a depilatory called Kormelu. The American Medical Association released evidence that Kormelu contained rat poison. That's when the National Consumers League and doctors began to lobby for FDA regulation of the beauty industry. Books like American Chamber of Horrors, Skin Deep, and 100,000,000 Guinea Pigs lambasted the government's lax stance about food, drug, and cosmetics manufacturers and they raised awareness about the dangers posed by use of unregulated products.

In 1938, Congress stepped in to pass the Food, Drug, and Cosmetic Act. The law extended the FDA's jurisdiction to include cosmetics, defined as "articles intended to be rubbed, poured, sprinkled, or sprayed on, introduced into, or otherwise applied to the human body . . . for promoting attractiveness." In contrast, drugs were defined as "articles intended for the use in diagnosis, cure, mitigation, treatment, or prevention of disease" or that are "intended to affect the structure or any function of the body of man."

This question of intent is paramount because a drugany product claiming to affect the structure of the body, regardless of what its ingredients aremust be reviewed by the FDA for safety and efficacy before it's sold on the market. Drug companies must report all complaints about drugs they make and market, and they must adhere to strict manufacturing processes. In other words, drugs must deliver the benefits they claim to, while doing no harm. Even products intended to be used as both a cosmetic and a drug are supposed to have their drug claims and ingredients regulated as drugs. For example, antidandruff shampoo must be labeled with the active antidandruff ingredient, and the ingredient must be tested before going on the market or have been previously recognized as safe and effective for the intended use.

Cosmetics, on the other hand, are produced, tested, labeled, marketed, and sold without any FDA supervision. With the exception of nine banned ingredients like mercury compounds and chloroform and a list of color additives, cosmetics firms can use any ingredients they want. They are also effectively free to make outsized claims about their products. The FDA has the right to inspect a factory, request a label change, and seize a product it deems dangerous or wrongly branded, but only after the questionable product has been brought to marketand has caught a regulator's eye.

Because they are so loosely regulated, cosmetics companies are supposed to refrain from making drug-like claims about their products. The director of the FDA's Office for Cosmetics and Colors, Dr. Linda Katz, puts this plainly: "If a manufacturer is making labeling claims that would make a cosmetic a drug, it is a drug. And it would need to go through the drug side for testing." If the FDA found that the maker of a cosmeceutical claimed that its product performed like a drug, the company could be penalized for distributing a misbranded or unapproved drug. Still, most companies are willing to take the risk of FDA censure because their chances of getting caught are slim. Even if they are apprehended, by the time the FDA receives a consumer complaint, sends off a series of warning letters, or issues a summons for an injunction, years might have passed. As in other industries, larger companies seem to prefer to pay fines as a cost of doing business and to continue with the bad behavior. With the increased medicalization of beauty, therapeutic claims are too profitable to pass up.

By stretching the limits of traditional claims about cosmetics and as a result of limited resources at the FDA, the cosmeceutical industry has avoided the much more costly process of getting its products approved as drugs. The drug side of the FDA, the Center for Drug Evaluation and Research, won't even talk about cosmeceuticalsthe center declined to have a representative interviewed for this article and referred interested parties back to Katz.

THE FDA HAS NOT ALWAYS BEEN AS PERMISSIVE. Laura Heymann, an assistant professor at William & Mary School of Law, reported that in the 1960s, for example, the FDA challenged cosmetics manufacturers that produced creams promising to smooth out wrinkles. The agency went to court numerous times against the manufacturers of Sudden Change and Line Away, creams that were composed of bovine albumin and water and, when applied to the face, that dried like filmy egg whites and temporarily tightened wrinkles.

The U.S. Court of Appeals for the Second Circuit held that, because Sudden Change advertised itself as a "Face Lift Without the Surgery" and because the manufacturer claimed that the product would "lift out puffs," it should be designated a drug. Likewise, the Third Circuit held that phrases like "super-active," "amazing protein lotion," and "tightening the skin" in Line Away's advertising materials implied that the product was therapeutic rather than cosmetic in nature, and that it should be regulated as a drug. Statements that Line Away was made in a "pharmaceutical laboratory" and packaged under "biologically aseptic conditions" implied that the product itself was a pharmaceutical. "When 'puffery' contains the strong therapeutic implications we find in the Line Away promotional material," the court stated, "we think the dividing line has been crossed." After the 1969 Third Circuit ruling, the manufacturers were forced to change their labeling or face further injunctions against sales and seizures of the products. They complied, and the products soon faded from the marketplace.

By the early 1980s, though, the cosmetics companies were at it again. In 1986, Dr. Christiaan Barnard, the surgeon who two decades before had performed the first heart transplant, co-created and endorsed Glycel, an anti-aging cream made by Alfin Fragrances that contained "glycosphingolipid," an ingredient whose unpronounceability made it seem scientific. He said it possessed "the ability to cause rejuvenation of cells," and women flocked to the beauty counter to buy it.

Estée Lauder and L'Oréal, which for years had been producing anti-aging creams of their own, rushed to label their products with scientific or scientific-sounding terms to compete with the surgeon-endorsed brand. The lotions promised to speed cell turnover, maximize oxygen uptake, strengthen the skin's inner structure, and reverse the effects of aging. Glycel touted "glycosphingolipid," but Estée Lauder responded with lotions containing "Cellular Recovery Complex."

In 1987, Daniel Michels, the director of the Office of Compliance for the FDA's Center for Drugs and Biologics, determined that the companies had gone too far. He issued warning letters to 23 cosmetics firms requesting that they cease making what he called structure/function claims. Claims about "cell rejuvenation," for example, would no longer be tolerated because they promised to affect the structure of the skin. That meant rewriting brochures and text on packaging, in addition to changing the products' advertisements. If the companies didn't respond, they risked product seizures, injunctions against sales, and lawsuits. The companies complied, and the FDA had the funds and political backing to keep them in checkfor a while.

THE 1938 ACT REQUIRES THE FDA TO REGULATE COSMETICS in order to protect consumers from injurious substances and economic harm. But the FDA has not kept up with the profusion of cosmeceuticals. "In my review, these regulatory gaps raise serious questions about the FDA's ability to effectively oversee the cosmetics industry in this country," said Senator Ron Wyden, the Democrat from Oregon, at a 1989 hearing about the potential health hazards of cosmetics productsand the story hasn't changed much since then.

Occasionally, the FDA issues warnings to manufacturers. In January, it sent one such letter to Basic Research, the marketer and distributor of StriVectin-SD and other products. "This letter is in reference to your firm's marketing and distribution of StriVectin-SD, StriVectin-SD Eye Cream, Dermalin-Apg, Mamralin-Ara, and TestroGel," the letter, written by FDA District Director B. Belinda Collins, reads. Some of the drug claims referred to in the letter include, "Clinically Proven to Dramatically Reduce the Appearance of Existing Stretch Mark Length, Depth, Texture, and Discoloration"; "Optimum Glycosaminoglycan and Collagen Synthesis"; "Better than Botox®?"; and "Superior wrinkle-reducing properties of a patented oligo-peptide. . . ." The list names nearly 40 other drug claims for Basic Research products, 11 of which pertain to StriVectin-SD. But this censure seems ineffective: According to one industry consultant, StriVectin-SD's earnings will reach over $100 million in 2005, a sign of FDA inaction and consumer confusion. For every FDA warning letter, thousands of misbranded cosmetics, especially anti-aging creams, slip by. The annual growth rate in the sales of anti-aging creams is 11 percent. As with all cosmetics, "If it's a cosmeceutical, you don't have to do a damn thing to prove that it works or that it's safe," Dr. Kligman explained. "There is no regulation whatsoever. You can get a bucket, mix it up in your basement, and put your name on it and sell it."

Despite the potential health risks of cosmeceuticals and the misbranding of products done by this anything-goes industry, the FDA is too busy to keep pace. "The FDA has higher priorities todaybioterrorism, including securing the food supply, and drug safety, both the drug approval process and post-approval monitoring," said Susan Brienza, a Denver-based attorney with the law firm of Patton Boggs LLP, who specializes in cosmetics regulation law and advises clients on issues such as labeling requirements. Richard Cleland, who monitors advertising practices at the Federal Trade Commission, which works in consort with the FDA to monitor advertising practices, agreed: "Cosmetics, in terms of enforcement priorities, tend not to be as high." The FDA and FTC, he explained, are more likely to go after dietary supplements and bogus cancer cures than anti-aging creams, because supplements might harm people and bogus cures might prevent them from seeking proper medical care.

It's logical that the FDA is choosing to focus on potentially harmful or life-altering drugs rather than anti-aging creams. But by doing so, it is ignoring a primary purpose of the 1938 actto protect the economic interests of consumers. The current regulatory scheme leaves consumers like Debra Scheufler with little recourse. Her case is unlikely to be certified as a class action, but from her point of view it's worth pursuing because the suit has raised public awareness about cosmeceuticals, which raises the chance she will be reimbursed by Estée Lauder. "The manufacturers know that if they go to court, the chances are about 90 percent that they'll lose," Richard Morey said. For that reason, and to avoid bad publicity, the companies usually settle injury and false advertising complaints out of court.

In the meantime, Scheufler is taking inventory of her medicine cabinet, relying on a cosmetics dictionary to help her cut through the pseudoscience. Her latest anti-aging treatment is to work out five days a week and stay out of the sun.

Erika Kawalek, associate director of the New York Institute for the Humanities at New York University, writes about fashion and design and is writing a cultural history about vintage clothing.